Note 4. Fair Value of Financial Instruments

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and provides disclosure requirements for fair value measurements. The Company accounts for its investments at fair value in accordance with ASC 820. As of December 31, 2025 and December 31, 2024, the Company’s portfolio investments consisted primarily of investments in secured loans and equipment financings. The fair value amounts have been measured as of the reporting date and have not been reevaluated or updated for purposes of these financial statements subsequent to that date. As such, the fair values of these financial instruments subsequent to the reporting date may be different than amounts reported.

In accordance with ASC 820, the Company has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3). See “Note 2 – Summary of Significant Accounting Policies.”

As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

The fair value determination of each portfolio investment categorized as Level 3 requires one or more of the following unobservable inputs:

•

Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;

•

Current and projected financial condition of the portfolio company;

•

Current and projected ability of the portfolio company to service its debt obligations;

•

Type and amount of collateral, if any, underlying the investment;

•

Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment;

•

Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);

•

Pending debt or capital restructuring of the portfolio company;

•

Projected operating results of the portfolio company;

•

Current information regarding any offers to purchase the investment;

•

Current ability of the portfolio company to raise any additional financing as needed;

•

Changes in the economic environment, which may have a material impact on the operating results of the portfolio company;

•

Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;

•

Qualitative assessment of key management;

•

Contractual rights, obligations or restrictions associated with the investment; and

•

Time to exit.

The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s investments, are earnings before interest, tax, depreciation, and amortization (“EBITDA”) and revenue multiples (both projected and historic). Significant increases (decreases) in EBITDA and revenue multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. Similarly, significant increases (decreases) in volatility inputs in isolation would result in a significantly higher (lower) fair value assessment. Conversely, significant increases (decreases) in weighted average cost of capital inputs in isolation would result in a significantly lower (higher) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.

The Company’s assets measured at fair value by investment type on a recurring basis as of December 31, 2025 were as follows (in thousands):


	Fair Value Measurements at Reporting Date Using
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Measured at
Assets	(Level 1)		(Level 2)		(Level 3)		Net Asset Value(1)		Total
Debt	$	—	$	—	$	2,199,964	$	—	$	2,199,964
Equity		—		—		108,342		31,843		140,185
Warrants		—		—		77,926		—		77,926
Total Investments at fair value		—		—		2,386,232		31,843		2,418,075
Cash and Cash Equivalents		19,110		—		—		—		19,110
Derivative Instruments		—		8		—		—		8
Total Investments including cash and cash equivalents and derivative instruments	$	19,110	$	8	$	2,386,232	$	31,843	$	2,437,193

(1)

In accordance with ASC 820, the Company's equity investments in Multi-Sector Holdings are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, and thus have not been classified in the fair value hierarchy.

The Company’s assets measured at fair value by investment type on a recurring basis as of December 31, 2024 were as follows (in thousands):


	Fair Value Measurements at Reporting Date Using
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Measured at
Assets	(Level 1)		(Level 2)		(Level 3)		Net Asset Value(1)		Total
Debt	$	—	$	—	$	1,602,131	$	—	$	1,602,131
Warrants		—		—		51,454		—		51,454
Equity		—		—		56,584		15,401		71,985
Total Investments at fair value		—		—		1,710,169		15,401		1,725,570
Cash and Cash Equivalents		9,627		—		—		—		9,627
Total Investments including cash and cash equivalents	$	9,627	$	—	$	1,710,169	$	15,401	$	1,735,197

(1)

The methodology for determining the fair value of the Company’s investments is discussed in “Note 2 – Summary of Significant Accounting Policies”. The following table provides a summary of the significant unobservable inputs used to measure the fair value of the Level 3 portfolio investments as of December 31, 2025.


	Fair Value as of
	December 31, 2025		Valuation Techniques/	Unobservable		Weighted
Investment Type	(in thousands)		Methodologies	Inputs (1)	Range	Average (2)

Debt investments	$	1,682,044	Discounted Cash Flows	Hypothetical Market Yield	3.8% - 36.5%		14.2	%

		442,889	Cost approximates fair value (6)	n/a	n/a	n/a

		22,258	Transaction Precedent (7)	Transaction Price	n/a	n/a

		39,888	Scenario Analysis	Probability Weighting of Alternative Outcomes	10.0% - 85.0%	n/a

		12,885	Enterprise Value (8)	n/a	n/a	n/a

Equity investments		82,042	Market Approach	Revenue Multiple (3)	0.3x - 47.5x		4.1	x
				Volatility (5)	40.2% - 105.6%		53.4	%
				Risk-Free Interest Rate	3.5% - 3.6%		3.5	%
				Estimated Time to Exit (in years)	0.5 - 3.8		2.4

		26,300	Cost approximates fair value (6)	n/a	n/a	n/a

Warrants		74,533	Market Approach	Revenue Multiple (3)	0.1x - 47.5x		10.4	x
				Company Specific Adjustment (4)	n/a	n/a
				Volatility (5)	35.5% - 140.9%		59.9	%
				Risk-Free Interest Rate	3.5% - 3.9%		3.5	%
				Estimated Time to Exit (in years)	1.0 - 4.5		2.4

		3,393	Black Scholes	Volatility (5)	61.2% - 128.0%		90.4	%
				Discount for Lack of Marketability	n/a	n/a
				Risk-Free Interest Rate	3.7% - 4.2%		4.0	%
				Estimated Time to Exit (in years)	4.7 - 9.8		7.8

Total Level 3 Investments	$	2,386,232

(1)

The significant unobservable inputs used in the fair value measurement of the Company’s debt securities are hypothetical market yields and premiums/(discounts). The hypothetical market yield is defined as the exit price of an investment in a hypothetical market to hypothetical market participants where buyers and sellers are willing participants. The significant unobservable inputs used in the fair value measurement of the Company’s equity and warrant securities are revenue multiples and portfolio company specific adjustment factors. Additional inputs used in the option pricing model (“OPM”) include industry volatility, risk free interest rate and estimated time to exit. Significant increases (decreases) in the inputs in isolation would result in a significantly higher (lower) fair value measurement, depending on the materiality of the investment. For some investments, additional consideration may be given to data from the last round of financing, merger or acquisition events near the measurement date.

(2)

Weighted averages are calculated based on the fair value of each investment.

(3)

Represents amounts used when the Company has determined that market participants would use such multiples when pricing the investments.

(4)

Represents amounts used when the Company has determined market participants would take into account these discounts when pricing the investments.

(5)

Represents the range of industry volatility used by market participants when pricing the investment.

(6)

Includes debt investments originated within the past three months, for which cost approximates fair value, unless events have occurred during the period that would indicate a different valuation is warranted.

(7)

Represents investments where there is an observable transaction or pending event for the investment.

(8)

The Company determined the value of its subordinated note of Senior Credit Corp 2022 LLC based on the total assets less the total liabilities senior to the subordinated notes held at Senior Credit Corp 2022 LLC in an amount not exceeding par under the Enterprise Value technique.

The following table provides a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of December 31, 2024.


	Fair Value as of
	December 31, 2024			Valuation Techniques/	Unobservable		Weighted
Investment Type	(in thousands)			Methodologies	Inputs (1)	Range	Average (2)

Debt investments	$		1,206,947	Discounted Cash Flows	Hypothetical Market Yield	9.6% - 56.3%		16.3	%

			369,600	Cost approximates fair value (6)	n/a	n/a	n/a

			12,699	Scenario Analysis	Probability Weighting of Alternative Outcomes	1.0% - 100.0%	n/a

			12,885	Enterprise Value (7)	n/a	n/a	n/a

Equity investments			56,584	Market Approach	Revenue Multiple (3)	0.5x - 34.9x		3.4	x
					Volatility (5)	40.1% - 118.8%		55.4	%
					Risk-Free Interest Rate	4.2% - 4.3%		4.3	%
					Estimated Time to Exit (in years)	1.0 - 4.5		2.8

Warrants			51,454	Market Approach	Revenue Multiple (3)	0.2x - 34.9x		4.1	x
					Company Specific Adjustment (4)	n/a	n/a
					Volatility (5)	35.4% - 127.9%		61.0	%
					Risk-Free Interest Rate	4.2% - 4.4%		4.3	%
					Estimated Time to Exit (in years)	0.7 - 5.0		2.4

Total Level 3 Investments		$	1,710,169

(1)

The significant unobservable inputs used in the fair value measurement of the Company’s debt securities are hypothetical market yields and premiums/(discounts). The hypothetical market yield is defined as the exit price of an investment in a hypothetical market to hypothetical market participants where buyers and sellers are willing participants. The significant unobservable inputs used in the fair value measurement of the Company’s equity and warrant securities are revenue multiples and portfolio company specific adjustment factors. Additional inputs used in the OPM include industry volatility, risk free interest rate and estimated time to exit. Significant increases (decreases) in the inputs in isolation would result in a significantly higher (lower) fair value measurement, depending on the materiality of the investment. For some investments, additional consideration may be given to data from the last round of financing, merger or acquisition events near the measurement date.

(2)

Weighted averages are calculated based on the fair value of each investment.

(3)

Represents amounts used when the Company has determined that market participants would use such multiples when pricing the investments.

(4)

Represents amounts used when the Company has determined market participants would take into account these discounts when pricing the investments.

(5)

Represents the range of industry volatility used by market participants when pricing the investment.

(6)

(7)

Under the enterprise value technique, the significant unobservable inputs used in the fair value measurement of the Company's investment in debt or equity securities are: (i) EBITDA, (ii) revenue or (iii) asset multiple; as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.

The following table provides a summary of changes in the fair value of the Company’s Level 3 debt, including loans and equipment financings (collectively “Debt”), equity and warrant portfolio investments for the year ended December 31, 2025 (in thousands):


	Type of Investment
	Debt			Equity			Warrants			Total
Fair Value as of December 31, 2024	$	1,602,131		$	56,584		$	51,454		$	1,710,169
Purchases, net of deferred fees		1,396,567			36,056			20,581			1,453,204
Non-cash conversions (1)		(4,640	)		4,751			(111	)		—
Proceeds from sales and paydowns		(809,842	)		(4,000	)		(5,323	)		(819,165	)
Accretion of OID, EOT, and PIK payments		50,593			87			—			50,680
Net realized gain/(loss)		(62,262	)		(679	)		(1,173	)		(64,114	)
Net change in unrealized appreciation/(depreciation)		27,417			15,543			12,498			55,458
Fair Value as of December 31, 2025	$	2,199,964		$	108,342		$	77,926		$	2,386,232

Net change in unrealized appreciation/(depreciation) on Level 3 investments still held as of December 31, 2025	$	(9,319	)	$	13,717		$	12,442		$	16,840

(1)

The non-cash conversion includes the conversion of debt positions and exercise of warrant positions to equity positions during the year ended December 31, 2025.


	Type of Investment
	Debt			Equity			Warrants			Escrow Receivables			Total
Fair Value as of December 31, 2023	$	1,222,077		$	15,150		$	31,201		$	2,441		$	1,270,869
Purchases, net of deferred fees		1,180,013			6,709			20,774			—			1,207,496
Non-cash conversion (1)		(25,674	)		31,802			(6,128	)		—			—
Transfers into/(out of) Level 3 (2)		(28,315	)		—			—			—			(28,315	)
Proceeds from sales and paydowns		(759,113	)		(11,477	)		8,006			(2,441	)		(765,025	)
Accretion of OID, EOT, and PIK payments		39,574			—			—			—			39,574
Net realized gain/(loss)		(21,294	)		7,826			(9,962	)		—			(23,430	)
Net change in unrealized appreciation/(depreciation)		(5,137	)		6,574			7,563			—			9,000
Fair Value as of December 31, 2024	$	1,602,131		$	56,584		$	51,454		$	—		$	1,710,169

Net change in unrealized appreciation/(depreciation) on Level 3 investments still held as of December 31, 2024	$	(24,105	)	$	4,631		$	1,996		$	—		$	(17,478	)

(1)

The non-cash conversion includes the conversion of debt positions and exercise of warrant positions to equity positions during the year ended December 31, 2024.

(2)

Transfers out of Level 3 during the year ended December 31, 2024, were related to the conversion of debt to equity in one publicly-traded portfolio company. During the year ended December 31, 2024, there were no transfers into Level 3.

Fair Value of Financial Instruments Carried at Cost

As of December 31, 2025 and December 31, 2024, the carrying value of the KeyBank Credit Facility was approximately $373.9 million and $113.0 million, respectively. The carrying value of the KeyBank Credit Facility as of December 31, 2025 and December 31, 2024 approximates the fair value, which was estimated using a relative market yield approach with Level 3 inputs.

As of December 31, 2025, the carrying value of the KeyBank Secured Term Loan Facility was approximately $198.5 million. The carrying value of the KeyBank Secured Term Loan Facility as of December 31, 2025 approximates the fair value, which was estimated using a relative market yield approach with Level 3 inputs.

As of December 31, 2025 and December 31, 2024, the carrying value of the 4.375% Notes due 2026 (the “August 2026 Notes”) was approximately $124.6 million and $124.1 million, respectively, net of unamortized deferred financing costs of $0.4 million and $1.0 million, respectively. The August 2026 Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company’s August 2026 Notes as of December 31, 2025 and December 31, 2024 was approximately $117.2 million and $114.1 million, respectively, which was estimated using a relative market yield approach with Level 3 inputs.

As of December 31, 2025, and December 31, 2024, the carrying value of the 4.25% Notes due 2026 (the “December 2026 Notes”) was approximately $74.6 million, and $74.3 million, respectively, net of unamortized deferred financing fees of $0.4 million and $0.7 million, respectively. The December 2026 Notes have a fixed interest rate as discussed in “Note 5 - Borrowings.” The fair value of the Company’s December 2026 Notes as of December 31, 2025 and December 31, 2024 was approximately $70.6 million and $68.6 million, respectively, which was estimated using a relative market yield approach with Level 3 inputs.

As of December 31, 2025 and December 31, 2024, the carrying value of the Company's 7.875% Notes due 2029 (the “March 2029 Notes”) was approximately $139.7 million and $112.1 million, respectively, net of unamortized deferred financing fees and premium of $2.5 million and $2.9 million, respectively. The March 2029 Notes have a fixed interest rate as discussed “Note 5 – Borrowings.” The fair value of the Company's March 2029 Notes as of December 31, 2025 and December 31, 2024 was approximately $143.3 million and $116.2 million, respectively, based on the market closing price of the March 2029 Notes, which trade on the Nasdaq Global Select Market under the symbol “TRINZ”.

As of December 31, 2025 and December 31, 2024, the carrying value of the Company's 7.875% Notes due September 2029 (the “September 2029 Notes”) was approximately $119.3 million and $111.6 million, respectively, net of unamortized deferred financing fees and premium of $2.9 million and $3.4 million, respectively. The September 2029 Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company's September 2029 Notes as of December 31, 2025 and December 31, 2024 was approximately $123.5 million and $118.0 million, respectively, based on the market closing price of the September 2029 Notes, which trade on the Nasdaq Global Select Market under the symbol “TRINI”.

As of December 31, 2025 and December 31, 2024, the carrying value of the Series A Senior Notes (the “Series A Notes”) was approximately $141.3 million and $140.9 million, respectively, net of unamortized deferred financing costs of $1.2 million and $1.7 million, respectively. The Series A Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company’s Series A Notes as of December 31, 2025 and December 31, 2024 was approximately $143.8 million and $142.5 million, respectively, which was estimated using a relative market yield approach with Level 3 inputs.

As of December 31, 2025, the carrying value of the Company's 6.750% Notes due July 2030 (the “July 2030 Notes”) was approximately $122.1 million, net of unamortized deferred financing costs and discount of $2.9 million. The July 2030 Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company’s July 2030 Notes as of December 31, 2025 was approximately $124.8 million, which was estimated using a relative market yield approach with Level 3 inputs.

Historical Timeline

Fiscal Year	Filed
2025	Feb 25, 2026	Showing above
2024	Feb 26, 2025

2023	Mar 6, 2024

2022	Mar 2, 2023

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Trinity Capital Inc. Fair Value Disclosure

Note 4. Fair Value of Financial Instruments

Historical Timeline

About Fair Value Disclosures

Other Available Disclosures